France courts Islamic finance, as long as it’s not too obvious

Tags:

In researching an article on what lay behind government plans to develop France as a European hub for Islamic finance, I was struck by the uneasy atmosphere surrounding the subject. On the one hand, the government sees it as a way to attract Middle Eastern money and wants to push the idea. But on the other, there is a clear sense of apprehension over how Islamic finance would fit into French society, where the policy of laïcité– the strict separation of church and state — tries to keep anything religious out of the public sphere as much as possible.

(Photo: Eiffel Tower in Paris, 20 Nov 2007/Mal Langsdon)

The bankers, lawyers, government officials and Islamic finance specialists trying to get Islamic finance off the ground in France speak publicly about the bright prospects they see for the market. France has the biggest Muslim population in Europe at over five million. The government is pushing the idea hard. There is a huge need for financing of future projects.

But privately, many admit that French companies and banks may hesitate to do anything that uses the label Islamic as this could highlight sensitivities over social and cultural divides. Ever since the French Revolution, France has upheld the idea that its people are all individual and equal citizens and not members of regional, ethnic or religious minorities. Stressing membership in a sub-group is considered divisive. The French frequently point to the multicultural approach taken in Britain and the United States as the source of political and social problems — such as ethnic or religious “ghettoisation” and “identity politics” — that they want to avoid.

Given this outlook, some French fear the Muslim community here is seeking to nurture its own identity in a way that sets them apart from ordinary French citizens and undermines the unity of the nation. The way in which Muslims openly speak about religion, rather than keeping their faith to themselves, looks to these French as a challenge to the principle of laïcité.

Not every charge of laïcité violation is necessarily valid. As one analyst put it: “You can see in so many papers that Islamic finance is a threat to laïcité , which is a complete nonsense. It proves that the people who write about this know nothing about Islamic finance. It has nothing to do with religion. It is making financial transactions according to a set of rules … these rules are ethical because they are Islamic.”

One expert admitted that the label Islamic would “not help” when French companies were deciding whether to raise cash by issuing Islamic bonds or conventional ones. Another said it would be “absolutely crazy” to call an institution conducting such business an Islamic bank. The Idea that a bank branch would have a giant sign reading “Banque Islamique de Paris” or something similar is so outlandish as to not even come up in conversation.

“The crux of the problem is that nobody wants it except for the Muslims and the Muslims have no power in France. They are not organised enough and have no lobbying power to see Islamic retail banking see the light of day,” said one industry specialist on condition of anonymity.

For Islamic finance to really take off, France will need to embrace not only the less visible wholesale banking side but the highly visible retail services too. The cash-heavy Middle Eastern partners whose money France aims to attract may well want to see neighbourhood bank branches offering Islamic mortgages in their shop windows and advertising them in the local media. Some might want their own branches, with their names emblazoned over the bank entrance, maybe in Arabic as well as in French. They will probably think that French banks offering Islamic finance should be as open about it as those in Britain.

It is archaic method for a bank to pronounce that they are adhering to a certain set of rules. Naming a bank as Islamic always give the impression that it is only serving a particular religious group and engaging business with them indicate adherence to that specific religion. It makes non-Muslims uneasy and doubtful whether it is religiously correct for them to do business with them.

They should come up with a certain neutral rule set, calling it something like the Vienna Laws or something, which is able to serve both the Muslims and non-Muslims.

A Islamic bank has one too many terms Islamic terms in their offerings for their own good.

Society as a whole should embrace a secular institutions rather than regress back to the medieval ages when things are segregated by faith.

We must not bow down to these Islamic pressure. Especially Europe which had been at the forefront of human civility and societal advances. Integrate, immigrants, not isolate!! ( Don’t confuse with assimilate) After all, if you wish to migrate to France or any other European nation, you must be prepared to absorb their culture and their way of life, rather than pressuring them to adhere to yours.

Unless you’re an illegal immigrant who knows no better. If that’s the case, go back home. Don’t create trouble here, and make a bad name for the rest.

drewbie & kamaljit bassi. You are envy of Islam and Islam phobia. You are sick people. The world is on the age of hell fire and they not only need Islamic banking but also true faith of Islam to save the mankind from hell fire…

Islamic finance is just creating a larger product offering among financial instruments. Larger product offering means more activity, more revenue, more profits, more jobs. When you look at premium employment websites (ones that don’t have agencies, but just big companies) like http://www.qual.fr or specialized elite recruitment portals, you can see that despite all the downturn in the financial sector, finance jobs are still multiplying like crazy. So long live Islamic finance: let’s usher in for the next wave hindu finance, jain finance, hasidic finance….